Your Rate Of Success
Your Successful Outcome
Although just about every property owner is eligible for a loan modification, each owner also faces a sliding scale of difficulty in negotiations with their lender. Some owners, such as those with one property, low-incomes and adjustable rate mortgages, are accepted automatically. Others owners, such as those with multiple properties, incomes that have fallen but used to be high, or fixed-rate mortgages face a much more difficult anchor text
negotiation.
Able Financial Solutions exists to help owners who face an uphill climb in their negotiations. Homeowners that have attempted a loan modification and have been told no by the lender, even after trial payments. We know the frustration you have faced and the time you have wasted.
Able Financial Solutions has the strategy, the know how, we understand how important your home is to you. We are here to help you tell your story and help you improve your bargaining position, but ultimately it is you who succeeds, not us.
As much as we enjoy telling the world about individual clients we’ve helped, the one client who really counts is you. We believe every individual we counsel and guide as a successful outcome. Some clients are better off not using our services, as they can achieve a beneficial loan modification on their own. Other clients may be eligible for our services, yet choose to explore some other avenues we recommend to resolve anchor text
their problems.
Although not every homeowner qualifies for a modification after our initial interview and analysis, every modification we pursue will result in changes to one or more of the five mortgage terms at issue in the loan modification negotiation.
What is a successful loan modification? Let’s look at a typical loan we recently modified.
Client F.H. calls and speaks with an analyst August 23rd 2010, fearful because he received a Notice of Sale date, he was seven months past due and just turned down two months ago for a loan modification. He owed over $21,000. in past due payments and late fees. The lender set the sale date for September 23rd 2010. August 26th F.H. called back and asked Able Financial Solutions to represent him. The outcome was completed September 21st, payments were reduced from $2,453. to $1,550. for the next 60 months. All past due amounts ($22,515) were negotiated and reduced by less than half ($10,000), and placed at the end of the loan.
No sale of the home, huge reduction in payments, dramatically reduced past due amount, no upfront fees, all on a mortgage loan which the home owner had tried to modify not once but twice in the past year.
Will your modification be similar? Only your circumstances can determine the outcome of your loan modification.anchor text
Do we have this type of success often? Every mortgage or loan modification we complete has tremendous benefits for the homeowners.
[Where Are Loan Modifications Done?~Where Are Mortgage Loan Modifications Done?]
There are 7 ways to modify the terms of a mortgage, and the relationship of different actors: owners, lenders, lawyers, consultants, trustees, government agencies, etc; are different for each solution. [In general, though, loan modifications are the most personal of the 7 available forms of relief~In general, though, mortgage loan modifications are the most personal of the 7 available forms of relief]. [State and federal governments are not involved in a loan modification, even though they’ve passed numerous laws providing incentives for lenders to negotiate with you~State and federal governments are not involved in mortgage loan modification, even though they’ve passed numerous laws providing incentives for lenders to negotiate with you]. A loan modification is, at is very essence, a negotiation between you and your lender for a change in one or more of any mortgage’s 5 terms.It’s Personal, and It Should Be
This is your future, and your financial well-being. No one is better positioned to advocate for you than yourself. [And if your personal situation qualifies you for one of the many government assistance programs encouraging loan modifications, than you really are better off pursuing the modification yourself~[And should your personal situation qualifies you for one of the many government assistance programs encouraging loan modifications, than you really are better off pursuing the modification yourself~And should your personal situation qualifies you for one of the many government assistance programs encouraging home loan modifications, than you really are better off pursuing the modification yourself~And should your personal situation qualify you for one of the many government assistance programs encouraging loan modifications, than you really are better off pursuing the modification yourself~And should your personal situation qualifies you for one of the many government assistance programs encouraging mortgage loan modifications, than you really are better off pursuing the modification yourself]~And if your personal situation qualifies you for one of the many government assistance programs encouraging loan modifications, than you really are better off pursuing the loan modification yourself~And if your personal situation qualifies you for one of the many government assistance programs encouraging loan modifications, than you really are better off pursuing the mortgage modification yourself]. [But if your situation places you outside the government threshold (a total mortgage debt greater than $729,750), than you may need a professional team like Able Financial Solutions to help you collect your bargaining chips for the negotiation with your lender~But if your circumstances place you outside the government threshold (a total mortgage debt greater than $729,750), than you may need a professional team like Able Financial Solutions to help you collect your bargaining chips for the negotiation with your lender].
Wait, negotiation? Does this mean I have to sit down at a table with my lender?
Of course not! [The loan modification process is actually nothing more than the back-and-forth submission of various documentation between you and the risk mitigation department at your lender’s corporate headquarters~The loan modification process is actually nothing more than the back-and-forth submission of various documentation between you and the mitigation department at your lender’s corporate headquarters]. [However, we feel that you must approach the modification process as if you were going to sit down at a table with your lender~However, we feel that you must approach the loan modification process as if you were going to sit down at a table with your lender]. You need a calculated strategy that will maximize your bargaining position, assert leverage over your lender, exact the greatest number of concessions on your new mortgage. If your situation places you above the current threshold for government-assisted modifications, than your initial bargaining position could be quite weak. That is where Able Financial Solutions comes in. [If your initial case for a loan modification doesn’t appear strong, we can provide you with the tactics you need to make your bargaining position stronger~If your initial case for a loan modification doesn’t appear strong, we’ll provide you with the tactics you need to make your bargaining position stronger~If your initial case for a loan modification doesn’t appear strong, we can provide you with the tactics you need to make your position stronger].
What Is A Mortgage Loan Modification?
Loan modifications are one of 7 ways that all property owner can renegotiate the terms of a mortgage with their lenders, even owners with high incomes and investment properties. You can learn more about these 7 solutions with our special article, The Seven Ways To Swim When You’re “Under Water”. This article highlights the various trade-offs of each solution and explains why Congress and the Obama Administration have endorsed loan modifications as a central policy in America’s economic recovery.But what is a mortgage loan modification?
Simply put, it is a negotiation with your lender through which concessions are made and new conditions are set that will result in a new, more manageable mortgage for you in the future. After modification, your new mortgage will result in better terms for you:That’s it!
At the end of the loan modification process, one or more of the five terms listed above will be renegotiated so that you can move forward on a stronger financial footing. And because loan modifications are the most flexible way to alter the terms of a mortgage — applying to just about everyone who owns property — you don’t have to worry about whether or not you qualify. [If you own any property, you are most likely eligible to pursue a modification of the five terms above~If you own a property, you’re most likely eligible to pursue a modification of the five terms above]. The only changes based on your situation are the tactics you need to get your loan modified successfully and advantageously.
Although just about every property owner is eligible for a loan modification, each owner also faces a sliding scale of difficulty in negotiations with their lender. Some owners, such as those with one property, low-incomes and adjustable rate mortgages, are accepted automatically. Others owners, such as those with multiple properties, incomes that have fallen but used to be high, or fixed-rate mortgages face a much more difficult negotiation.
Seven Ways To Get Relief From Slipping Under Water
There are seven ways to alter the terms of your mortgage. Learn the details and trade-offs of each below and decide which one is right for you.
Refinance
What is it?In a mortgage refinance, homeowners fundamentally take out a new mortgage that replaces their present one. It is a lot like selling your home to yourself. The value of your property is assessed, just as it would be if it was going to be placed on the market, and you renegotiates the terms of a new mortgage based on the interest rates of the day.
When Does It Work? When housing prices are high and interest rates are low, which explains why refinancing was so popular from 2002 to 2007.
Why Does It Not Work? When housing prices have fallen to the point where homeowners no longer have any equity in the property. This is why the refinancing industry, so busy and active 2 years ago, is practically unheard of today.
Pros: When done at the right time, refinancing can give homeowners cash in their pocket (if the value of their home increased since they took out their last mortgage), and lower monthly payments (if interest rates have fallen, or their credit rating has increased, since they took out their last mortgage).
< p>Cons: Fees, fees and more fees. Because you’re basically selling your home to yourself, all of the assessment fees, escrow fees and handling fees you paid when you first bought your property still apply.
Repayment Plans
What Is It? Mortgage repayment plans are a great solution to temporary hardship on the part of a homeowner. This solution involves the lender temporarily modifying the terms of a mortgage so that the homeowner can enjoy lower payments in the short-term at the expense of higher payments or longer time periods in the future. It is essentially a case where the lender bets that you, the homeowner, are a good investment; that you are likely to overcome your temporary setback and fulfill your mortgage.
When Does It Work? If a homeowner has a great relationship with a lender, and if the lender itself is on a sound financial footing, repayment plans are the best option for everyone involved. They are revenue neutral for lenders, and homeowners are all in all generally happy to endure stricter long-term conditions in exchange for temporarily relief when they need it most.
When Does It Not Work? When lenders are receiving billions of dollars in government bail-outs because they are not financially sound, or when high unemployment makes it unlikely that a homeowner’s hardship will be temporary.
Pros: Least costly option for both the lender and the homeowner.
Cons: Too conditional. The national unemployment rate and the global financial crisis simply makes it too difficult for lenders and homeowners to credibly negotiate a repayment plan.
Forbearance
What Is It? Forbearance is a temporary suspension of monthly mortgage payments. It is generally used for temporary hardships that are foreseen in advance by homeowners and lenders. Setbacks such as death, divorce, unemployment or illness are widely accepted as temporary hardships by lenders.
When Does It Work? Similar to repayment plans, the forbearance solution is only possible when lenders are financially stable and when are confident that a homeowner’s hardship is temporary.
When Does It Not Work? Again, similar to repayment plans, forbearance agreements are unlikely to be negotiated when lenders themselves are in financial difficulty, and when homeowners are facing a challenging labor market.
Pros: Homeowners do not have to make any mortgage payments for several months, and lenders get to roll the suspended payments into the rest of the mortgage principal and earn higher returns in the future.
Cons: In exchange for a temporary respite, homeowners must pay back a larger sum then their initial mortgage stipulated.
Deed In Lieu
What Is It? When a homeowner turns over their property to their lender in exchange for (”in lieu of”) terminating their mortgage obligations. This is not the same as “walking away from a mortgage”, which is actually foreclosure. With Deed In Lieu, the lender must agree to take dominion of your property in exchange for relieving you of all subsequent mortgage payments.
When Does It Work? When the value of a property is still relatively high, i.e. less than 5% below the value of an owner’s mortgage. Prior to the housing crisis in America hitting full swing, Deeds In Lieu were great ways for banks and owners to avoid the high costs and staining legacy of foreclosure.
When Does It Not Work? When housing prices have plummeted to the point where lenders no longer wish to take over ownership of a property in exchange for relieving a mortgage obligation. In today’s market, lenders will lose too much money if they agreed to Deeds In Lieu so the incentive for negotiation just isn’t there.
It delivers all of the benefits of foreclosure for both owners and lenders without the disadvantages: High costs for lenders, a giant “F” on a credit report for owners.
Cons: Owners do not get to stay in their homes, and lenders must now find a way to sell the property they just received the deed to.
Short Sales
What Is It? When a owner sells a property for less than the value of the mortgage and turns all of the proceeds from this sale over to the lender. The lender agrees to this sale because the entire mortgage will paid off quickly. The lender is losing money by not enjoying years of interest payments, but short sales can occasionally be the “least bad option” available for both parties involved.
When Does It Work? When a short sale is likely to provide the lender with a sufficient return over the short-term for it to allow the owner to proceed with the sale.
When Does It Not Work? When housing prices have fallen to the point where properties cannot be sold, or if the money likely to be earned from a sale is sufficient for the lender to agree to it.
Pros: Slightly cheaper than foreclosure, but still incredibly expensive. Owners do achieve a timely, albeit brutal, relief from their mortgage obligations.
Cons: Owners do not get to remain in their homes, and the process generally results in a tremendous loss of money for both owners and lenders.
Foreclosure
What Is It? When a owner announces to a lender that he or she is no longer able to meet the terms of a mortgage, or when a lender declares that a mortgage is in default and it is taking control of a property. The mortgage lender then becomes the owner of the property and must find some way to sell it and make a little profit in the future.
When Does It Work?Foreclosure is constantly an option, although it is absolutely not a good one. It is the last and final solution available for lenders and owners. No one likes it, everyone is hurt by it, but it does remove the mortgage obligation for the owner.
When Does It Not Work? Never. Foreclosure is always an option.
Pros: Difficult though it may be, foreclosure does terminate a mortgage and provide relief to the owner, at the cost of a seven-year stain on the owner’s credit rating (the big “F”).
Cons: Foreclosures take between 150 and 390 days to complete depending on the state a property is located, and costs lenders an average of $50,000 per property to complete. That cost is endured even before the lender is able to resell the property, which could result in even greater losses given the scope of the national housing crisis. As for owners, those who foreclose are financially ruined and removed from their home.
Loan Modification
mortgage modification Is It? A negotiation between between a lender and an owner to change one or more of a mortgage’s five key terms.
When Does It Work? Almost all the time, although the probability of success is higher or lower depending on the situation. Adjustable-rate mortgages at high interest rates are automatically accepted for modification. Fixed rate mortgages at low interest rates are rarely accepted, but there’s always a chance for success.
home loan modification Does It Not Work? The leading cause of rejected modification applications is homeowners failing to understand and navigate the system correctly. In the hands of a professional team like Able Financial Solutions, owners can achieve the strongest possible bargaining position for the loan modification negotiation, increasing the likelihood of success.
Less expensive than foreclosure or short-sales for lenders, which increases the chance that lenders will completely negotiate in good faith. If successful, owners are able to stay in their homes, achieve financial relief and endure a less painful impact on their credit-rating.
Cons: Because owners must personally negotiate with lenders, loan modification can be a scary, nerve-wracking process. But with a team like Able Financial Solutions, owners can develop a calculated strategy for success and can negotiate with confidence that the best interest of both them and the lender.
Seven Ways To Get Relief From Slipping Under Water
There are seven ways to alter the terms of your mortgage. Learn the details and trade-offs of each below and decide which one is right for you.
Refinance
What is it?In a mortgage refinance, homeowners fundamentally take out a new mortgage that replaces their present one. It is a lot like selling your home to yourself. The value of your property is assessed, just as it would be if it was going to be placed on the market, and you renegotiates the terms of a new mortgage based on the interest rates of the day.
When Does It Work? When housing prices are high and interest rates are low, which explains why refinancing was so popular from 2002 to 2007.
Why Does It Not Work? When housing prices have fallen to the point where homeowners no longer have any equity in the property. This is why the refinancing industry, so busy and active 2 years ago, is practically unheard of today.
Pros: When done at the right time, refinancing can give homeowners cash in their pocket (if the value of their home increased since they took out their last mortgage), and lower monthly payments (if interest rates have fallen, or their credit rating has increased, since they took out their last mortgage).
< p>Cons: Fees, fees and more fees. Because you’re basically selling your home to yourself, all of the assessment fees, escrow fees and handling fees you paid when you first bought your property still apply.
Repayment Plans
What Is It? Mortgage repayment plans are a great solution to temporary hardship on the part of a homeowner. This solution involves the lender temporarily modifying the terms of a mortgage so that the homeowner can enjoy lower payments in the short-term at the expense of higher payments or longer time periods in the future. It is essentially a case where the lender bets that you, the homeowner, are a good investment; that you are likely to overcome your temporary setback and fulfill your mortgage.
When Does It Work? If a homeowner has a great relationship with a lender, and if the lender itself is on a sound financial footing, repayment plans are the best option for everyone involved. They are revenue neutral for lenders, and homeowners are all in all generally happy to endure stricter long-term conditions in exchange for temporarily relief when they need it most.
When Does It Not Work? When lenders are receiving billions of dollars in government bail-outs because they are not financially sound, or when high unemployment makes it unlikely that a homeowner’s hardship will be temporary.
Pros: Least costly option for both the lender and the homeowner.
Cons: Too conditional. The national unemployment rate and the global financial crisis simply makes it too difficult for lenders and homeowners to credibly negotiate a repayment plan.
Forbearance
What Is It? Forbearance is a temporary suspension of monthly mortgage payments. It is generally used for temporary hardships that are foreseen in advance by homeowners and lenders. Setbacks such as death, divorce, unemployment or illness are widely accepted as temporary hardships by lenders.
When Does It Work? Similar to repayment plans, the forbearance solution is only possible when lenders are financially stable and when are confident that a homeowner’s hardship is temporary.
When Does It Not Work? Again, similar to repayment plans, forbearance agreements are unlikely to be negotiated when lenders themselves are in financial difficulty, and when homeowners are facing a challenging labor market.
Pros: Homeowners do not have to make any mortgage payments for several months, and lenders get to roll the suspended payments into the rest of the mortgage principal and earn higher returns in the future.
Cons: In exchange for a temporary respite, homeowners must pay back a larger sum then their initial mortgage stipulated.
Deed In Lieu
What Is It? When a homeowner turns over their property to their lender in exchange for (”in lieu of”) terminating their mortgage obligations. This is not the same as “walking away from a mortgage”, which is actually foreclosure. With Deed In Lieu, the lender must agree to take dominion of your property in exchange for relieving you of all subsequent mortgage payments.
When Does It Work? When the value of a property is still relatively high, i.e. less than 5% below the value of an owner’s mortgage. Prior to the housing crisis in America hitting full swing, Deeds In Lieu were great ways for banks and owners to avoid the high costs and staining legacy of foreclosure.
When Does It Not Work? When housing prices have plummeted to the point where lenders no longer wish to take over ownership of a property in exchange for relieving a mortgage obligation. In today’s market, lenders will lose too much money if they agreed to Deeds In Lieu so the incentive for negotiation just isn’t there.
It delivers all of the benefits of foreclosure for both owners and lenders without the disadvantages: High costs for lenders, a giant “F” on a credit report for owners.
Cons: Owners do not get to stay in their homes, and lenders must now find a way to sell the property they just received the deed to.
Short Sales
What Is It? When a owner sells a property for less than the value of the mortgage and turns all of the proceeds from this sale over to the lender. The lender agrees to this sale because the entire mortgage will paid off quickly. The lender is losing money by not enjoying years of interest payments, but short sales can occasionally be the “least bad option” available for both parties involved.
When Does It Work? When a short sale is likely to provide the lender with a sufficient return over the short-term for it to allow the owner to proceed with the sale.
When Does It Not Work? When housing prices have fallen to the point where properties cannot be sold, or if the money likely to be earned from a sale is sufficient for the lender to agree to it.
Pros: Slightly cheaper than foreclosure, but still incredibly expensive. Owners do achieve a timely, albeit brutal, relief from their mortgage obligations.
Cons: Owners do not get to remain in their homes, and the process generally results in a tremendous loss of money for both owners and lenders.
Foreclosure
What Is It? When a owner announces to a lender that he or she is no longer able to meet the terms of a mortgage, or when a lender declares that a mortgage is in default and it is taking control of a property. The mortgage lender then becomes the owner of the property and must find some way to sell it and make a little profit in the future.
When Does It Work?Foreclosure is constantly an option, although it is absolutely not a good one. It is the last and final solution available for lenders and owners. No one likes it, everyone is hurt by it, but it does remove the mortgage obligation for the owner.
When Does It Not Work? Never. Foreclosure is always an option.
Pros: Difficult though it may be, foreclosure does terminate a mortgage and provide relief to the owner, at the cost of a seven-year stain on the owner’s credit rating (the big “F”).
Cons: Foreclosures take between 150 and 390 days to complete depending on the state a property is located, and costs lenders an average of $50,000 per property to complete. That cost is endured even before the lender is able to resell the property, which could result in even greater losses given the scope of the national housing crisis. As for owners, those who foreclose are financially ruined and removed from their home.
Loan Modification
mortgage modification Is It? A negotiation between between a lender and an owner to change one or more of a mortgage’s five key terms.
When Does It Work? Almost all the time, although the probability of success is higher or lower depending on the situation. Adjustable-rate mortgages at high interest rates are automatically accepted for modification. Fixed rate mortgages at low interest rates are rarely accepted, but there’s always a chance for success.
home loan modification Does It Not Work? The leading cause of rejected modification applications is homeowners failing to understand and navigate the system correctly. In the hands of a professional team like Able Financial Solutions, owners can achieve the strongest possible bargaining position for the loan modification negotiation, increasing the likelihood of success.
Less expensive than foreclosure or short-sales for lenders, which increases the chance that lenders will completely negotiate in good faith. If successful, owners are able to stay in their homes, achieve financial relief and endure a less painful impact on their credit-rating.
Cons: Because owners must personally negotiate with lenders, loan modification can be a scary, nerve-wracking process. But with a team like Able Financial Solutions, owners can develop a calculated strategy for success and can negotiate with confidence that the best interest of both them and the lender.
Commercial Loans And Loan Modifications
mortgage modification commercial business properties, multi-unit complexes, multi unit residential and stand alone residential rental properties.
If there’s one industry that’s been hit harder in southern California than residential housing, it’s been commercial property. Empty shopping centers, vacated office complexes and falling rents have placed a severe burden on the owners of retail, office and residential rental properties. It seems like every economic factor that clobbered residential housing in California has hit commercial property twice as hard. Residential tenants are losing their jobs, moving out of their apartments and protesting rent increases. Retail centers are suffering under lower consumer spending and offices are shutting their doors due to the recession.
loan modification all of these reasons, commercial property owners are just as entitled to successful loan modifications as residential property owners. However, the government support and regulatory incentives that exist for distressed homeowners have not been put in place for commercial property owners. These owners, so vital to the economy of southern California, have been inconceivably left out of stimulus packages and relief programs, as if the sub-prime mortgage owners were the ones who made the economy turn.
Help is available for commercial property owners, but you have to fight for it. Able Financial Solutions has an outstanding track record of success with income commercial property loan modifications. Yes Indeed, these loans are what we’re the very best at, because the path to success depends on precisely the factors we emphasize in our residential loan modifications: Strong up-front research, tireless execution and aggressive negotiation. There are few government and regulatory incentives that encourage lenders to negotiate commercial loan modifications in good faith, so we will help you collect the bargaining chips necessary for you to negotiate aggressively from a position of strength.
mortgage modification Commercial Loan Modification Process
- Time Period — The 45-day timeline we promise for residential loan modifications is not possible with commercial property. However, with our deep contacts in the area and our fluency of the local legal environment, we can complete most commercial loan modifications within 180 days in most southern California communities.
- Low Cost Guarantee — Although our iron clad guarantee for residential loan modifications is not possible with commercial property, we do guarantee that your up-front, pre-modification costs will be the lowest of any commercial loan modification company in southern California.
- Success Rate — Our success rate with commercial loan modification is just as high as it is with residential mods. Simply put: We will find a solution for you based on the tools we have available. Loan modification will be our first choice, but if that fails, we will find another solution. Regardless of the circumstances, you will have a much better financial outlook once you speak with Able Financial Solutions..
All The Many Different Ways To Get Relief From Slipping And Drowning Under Water
There are seven ways to alter the terms of your mortgage. Learn the details and trade-offs of each below and decide which one is right for you.
Refinance What is it? In a mortgage refinance, homeowners essentially take out a new mortgage that replaces their current one. It is a lot like selling your home to yourself. The value of your property is assessed, just as it would be if it was going to be placed on the market, and you renegotiates the terms of a new mortgage based on the interest rates of the day.
When Does It Work? When housing prices are high and interest rates are low, which explains why refinancing was so popular from 2002 to 2007.
Why It Will Not Work? When housing prices have fallen to the point where homeowners no longer have any equity in the property. This is why the refinancing industry, so busy and active 2 years ago, is practically unheard of today.
Pros: When done at the right time, refinancing can give homeowners cash in their pocket (if the value of their home increased since they took out their last mortgage), and lower monthly payments (if interest rates have fallen, or their credit rating has increased, since they took out their last mortgage).
Cons: Fees, fees and more fees. Because you’re basically selling your home to yourself, all of the assessment fees, escrow fees and handling fees you paid when you first bought your property still apply.
Repayment Plans What Is It? Mortgage repayment plans are a great solution to temporary hardship on the part of a homeowner. This solution involves the lender temporarily modifying the terms of a mortgage so that the homeowner can enjoy lower payments in the short-term at the expense of higher payments or longer time periods in the future. It is essentially a case where the lender bets that you, the homeowner, are a good investment; that you are likely to overcome your temporary setback and fulfill your mortgage.
When Does It Work? If a homeowner has a great relationship with a lender, and if the lender itself is on a sound financial footing, repayment plans are the best option for everyone involved. They are revenue neutral for lenders, and homeowners are generally happy to endure stricter long-term conditions in exchange for temporarily relief when they need it most.
When Does It Not Work? When lenders are receiving billions of dollars in government bail-outs because they are not financially sound, or when high unemployment makes it unlikely that a homeowner’s hardship will be temporary.
Pros: Least costly option for both the lender and the homeowner.
Cons: Too conditional. The national unemployment rate and the global financial crisis simply makes it too difficult for lenders and homeowners to credibly negotiate a repayment plan.
Forbearance What Is It?The act of forbearance is a temporary suspension of all monthly mortgage payments. It is generally but not always used for temporary hardships that are foreseen in advance by homeowners and lenders. Setbacks such as death, divorce, unemployment or illness are accepted as temporary hardships by lenders.
When Does It Work? Similar to repayment plans, the forbearance solution is only possible when lenders are financially stable and when are confident that a homeowner’s hardship is temporary.
When Does It Not Work? Again, similar to repayment plans, forbearance agreements are unlikely to be negotiated when lenders themselves are in financial difficulty, and when homeowners are facing a challenging labor market.
Pros: Homeowners do not have to make any mortgage payments for several months, and lenders get to roll the suspended payments into the rest of the mortgage principal and earn higher returns in the future.
Cons: In exchange for a temporary respite, homeowners must pay back a larger sum then their initial mortgage stipulated.
Deed In Lieu What Is It? When a homeowner turns over their property to their lender in exchange for (”in lieu of”) terminating their mortgage obligations. This is not the same as “walking away from a mortgage”, which is actually foreclosure. With Deed In Lieu, the lender must agree to take possession of your property in exchange for relieving you of all future mortgage payments.
When Does It Work? When the value of a property is still relatively high, i.e. less than 5% below the value of an owner’s mortgage. Before the housing crisis in America hit full swing, Deeds In Lieu were great ways for banks and owners to avoid the high costs and staining legacy of foreclosure.
When Does It Not Work? When housing prices have plummeted to the point where lenders no longer wish to take over ownership of a property in exchange for relieving a mortgage obligation. In today’s market, lenders will lose too much money if they agreed to Deeds In Lieu so the incentive for negotiation just isn’t there.
Pros: It achieves all of the benefits of foreclosure for both owners and lenders without the downsides: High costs for lenders, a giant “F” on a credit report for owners.
Cons: Owners do not get to stay in their homes, and lenders must now find a way to sell the property they just received the deed to.
Short Sales What Is It? When a owner sells a property for less than the value of the mortgage and turns all of the proceeds from this sale over to the lender. The lender agrees to this sale because the entire mortgage will paid off quickly. The lender is losing money by not enjoying years of interest payments, but short sales can occasionally be the “least bad option” available for both parties involved.
When Does It Work?When a the reality of a short sale is likely to provide the lender with more than a sufficient return over the short-term for it to allow the owner to proceed with the sale.
When Does It Not Work? When housing prices have fallen to the point where properties cannot be sold, or if the money likely to be earned from a sale is sufficient for the lender to agree to it.
Slightly less expensive than foreclosure, but still incredibly expensive. Owners do achieve a timely, albeit brutal, relief from their mortgage obligations.
The Owners will not get to remain in their homes, and this process results in a huge loss of money for both home owners and mortgage lenders.
Foreclosure What Is It? When a owner announces to a lender that he or she is no longer able to meet the terms of a mortgage, or when a lender declares that a mortgage is in default and it is taking control of a property. The lender then becomes the new owner of the property and must find some way to sell it and create a profit in the future.
When Does It Work? Foreclosure is always an option, although it is never a good one. It is the last and final solution available for lenders and owners. No one likes it, everyone is hurt by it, but it does remove the mortgage obligation for the owner.
When Does It Not Work? Never. Foreclosure is always an option.
Pros: Difficult though it may be, foreclosure does terminate a mortgage and provide relief to the owner, at the cost of a seven-year stain on the owner’s credit rating (the big “F”).
Cons: Foreclosures take between 150 and 390 days to complete depending on the state a property is located, and costs lenders an average of $50,000 per property to complete. That cost is endured even before the lender is able to resell the property, which could result in even greater losses given the scope of the national housing crisis. As for owners, those who foreclose are financially ruined and removed from their home.
mortgage modification What Is It? A negotiation between between a lender and an owner to change one or more of a mortgage’s five key terms.
When Does It Work? Almost all the time, although the probability of success is higher or lower depending on the situation. Adjustable-rate mortgages at high interest rates are automatically accepted for modification. Fixed rate mortgages at low interest rates are rarely accepted, but there’s always a chance for success.
When Does It Not Work? The leading cause of rejected modification applications is homeowners failing to understand and navigate the system correctly. In the hands of an extremely professional team like Able Financial Solutions the property owners can achieve the strongest possible bargaining position for the loan modification negotiation, increasing the likelihood of success.
Pros: Cheaper than foreclosure or short-sales for lenders, which increases the chance that lenders will negotiate in good faith. If successful, owners are able to stay in their homes, achieve financial relief and endure a less painful impact on their credit-rating.
Because home owners must personally negotiate with lenders, loan modification can be an extremely scary, nerve-wracking process to navigate. But with a team like Able Financial Solutions, owners can develop a calculated strategy for success and can negotiate with confidence that the best interest of both them and the lender.